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SIEMENS

Research & Development
Technology Press and Innovation Communications

Dr. Ulrich Eberl
Herr Dr. Ulrich Eberl
  • Wittelsbacherplatz 2
  • 80333 Munich
  • Germany
Dr. Ulrich Eberl
Herr Florian Martini
  • Wittelsbacherplatz 2
  • 80333 Munich
  • Germany
Renewable Energy Sources: Broad Global Growth

Sustainable energy systems require measures that are as precisely aligned with one another as possible. Such measures should include not only technological solutions but also the creation of appropriate conditions by government policymakers. Germany’s energy revolution will be the most ambitious program in the energy sector over the next few decades. Germany is not alone here, as other countries are also trying to make their energy systems more sustainable.
According to the Renewables 2012 Global Status Report published by the REN21 international policy network, renewable energy sources (including hydro power) now account for 16.7 percent of global final energy use and 20.3 percent of worldwide electricity use. The OECD and the International Energy Agency (IEA) estimate that global electricity production from renewable sources plus hydro power will increase by nearly 60 percent between 2011 and 2017, when it will reach almost 6,400 terawatt hours (TWh) per year — around ten times the current electricity consumption figure for Germany.
Siemens believes the share of renewables plus hydro power in the electricity mix will rise to 28 percent by 2030, with coal and gas power plants still accounting for 58 percent of the electricity generated in that year. Global power plant capacity is likely to increase by more than 7,000 gigawatts (GW) between 2012 and 2030, whereby 1,084 GW will come from wind parks alone and 642 GW from photovoltaic facilities. One out of every four newly installed gigawatts of electrical output — or a total of 1,683 GW between now and 2030 — will be produced in China, followed by the EU (983 GW), the U.S. (847 GW), and India (763 GW).
Solar energy is the most heavily funded renewable. According to IMS Research, 23 countries will add at least 100 megawatts (MW) of photovoltaic (PV) power each in 2012. Germany will remain the world’s biggest PV market, followed by China and Italy. Bavaria is the biggest PV market within Germany. The E.ON power company estimates that the total output of PV facilities connected to its grid in Bavaria is more than 4.3 GW. That’s nearly 20 percent of the total installed PV output in Germany, and also much more than the 3 GW of installed output in the entire U.S.

Germany’s Renewable Energy Act (EEG), which went into effect in April 2000, has played a key role in the country’s renewable energy boom. The law has since been copied by 50 countries, according to the Fraunhofer Institute for Wind Energy and Energy System Technology. The EEG requires grid operators to purchase electricity from renewable sources at a set price from those who produce it. The German Renewable Energies Agency says countries that use a feed-in tariff system (e.g. Germany, Spain, France, and Portugal) pay much less then ten euro cents per kilowatt hour (ct/kWh) for onshore wind power.
Other nations have quotas for the share of national energy consumption that must be accounted for by renewables. In this setup, energy suppliers must purchase electricity produced from renewable resources until the quota has been met. This is being done in the UK, Poland, Belgium, and Italy, for example. With prices of 11 to nearly 15 ct/kWh, onshore wind power in these countries is much more expensive than in nations that use a feed-in tariff system. Experts say the EEG urgently needs to be reworked, however. For one thing, more than 50 percent of EEG subsidies go to PV facilities, but these only supply three percent of total electricity. The RWI institute for economic research reports that the accumulated subsidies for solar power reached €100 billion in Germany in 2012.
The EU, for its part, has agreed on a new directive concerning energy efficiency that will require its member states to take measures to reduce their annual energy sales by 1.5 percent. This could be done by instituting requirements for saving energy or by offering tax breaks for investments aimed at improving energy efficiency. The American Council for an Energy-Efficient Economy (ACEEE) has developed an international energy efficiency scorecard that focuses on buildings, industrial facilities, and transport systems. European countries including the UK, Germany, Italy, and France performed much better on the scorecard in 2012 than the U.S. or Brazil.

Still, the U.S. has set aside a substantial amount of money in its 2012 budget for promoting energy from renewable sources. The U.S. Department of Energy will provide approximately $3 billion for energy efficiency measures and renewable energy, for example, while the Department of Agriculture will spend a further $6 billion to promote the use of energy from renewable sources to generate electricity in rural areas. Cash grants will be a key incentive for developing the solar energy sector, as they will provide funding for 30 percent of the installation costs of solar facilities.
Germany Trade & Invest, the foreign trade and inward investment agency of the Federal Republic of Germany, reports that the temporary shutdown of all nuclear power plants after the accident at Fukushima, as well as the energy conservation measures that were taken as a result, have led the Japanese to rethink their approach to power generation. For example, Japan now plans to subsidize solar energy in line with the German model by introducing a feed-in tariff of 40 ct/kWh. A total of 10 GW of installed PV output will be added to the grid by 2014. Japan is also moving ahead with the creation of smart grids. The focus in this area includes efficient energy management systems for buildings and the integration of electric vehicles and batteries into intelligent networks.
China also launched its first feed-in tariff system for solar power in July 2011 — and raised its PV expansion target to 50 GW, to be installed by 2020. Wind power is also a big issue in China, which had only 2.6 GW of installed wind output in 2006 but plans to increase that figure to roughly 150 GW by 2020 — the equivalent of the output of all the power plants operating in Germany today. China is relying on smart grid solutions as well. The first pilot projects are under way for smart metering and electric vehicle charging stations. China’s twelfth Five-Year Plan (2011–2015) also focuses on increasing energy efficiency in all areas.
Sustainable energy systems don’t come cheap. A survey conducted by a number of consumer protection associations found that energy suppliers in Germany cut off power to some 600,000 households every year due to unpaid bills. “Approximately ten to 15 percent of the population is struggling to pay for constantly rising energy costs,” says Klaus Müller, Director of the Central Consumer Protection Association in the German state of North Rhine-Westphalia. In a study conducted in 2012, the Karlsruhe Institute of Technology predicted that electricity prices in Germany could rise by 70 percent between now and 2035. The cost drivers of this increase include the expansion and subsidization of renewable energy, grid expansion, and the phasing out of nuclear power.

Experts at Roland Berger Strategy Consultants believe that electricity-intensive industries in particular could be hit by price increases of nearly 70 percent in the course of the next 20 years. The industries in this category paid 6.8 ct/kWh in 2010; this figure will increase to roughly 10.5 ct/kWh by 2030. Still, the Roland Berger researchers also point out that efficiency-enhancing measures such as the optimization of manufacturing processes could lead to a 40 to 50 percent reduction of electricity costs in such industries in the course of the next few decades. The danger posed by price increases to industry, especially to large companies, is limited in Germany due to the EEG’s compensation rule, whereby companies pay the full EEG surcharge only on the first million kilowatt hours of electricity they consume. They then pay just ten percent of the charge for every additional kilowatt hour, and this figure is reduced to only one percent after 10 million kWh. According to Germany’s Federal Network Agency, such companies will account for 18 percent of total electricity demand in 2012, but they will only contribute 0.3 percent of the total surcharge.

Sylvia Trage